Marketing 340 Chapter 9 New product pricing

Marketing 340 Chapter 9 New product pricing - Chapter 9 New...

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Chapter 9 New product pricing New-Product Pricing Strategies Market-skimming pricing Setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price Company makes fewer but more profitable sales Market-penetration pricing Setting a low price for a new product to attract a large number of buyers and a large market share When to use market-skimming pricing Product’s quality and image supports its higher price Costs of low volume cannot be so high that they cancel out the benefit of higher price Competitors should not be able to enter market easily and undercut price When to use market-penetration pricing Market is highly price sensitive so a low price produces more growth Production and distribution costs decrease as sales volume increases Low price can help keep out the competition, and the penetration pricer can maintain its low-price position Product Mix Pricing Strategies Product line pricing
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